Lastly, we come to the entry “Postages, 5s.” The manager, during the half-year, writes numerous letters to his customers, sends their pass-books to them through the post, and so on; therefore, in order to reduce his incidental expenses, he debits a few shillings to certain easy-going clients before the books are ruled off, and so as to prevent awkward questions being asked, he includes these small sums with “charges.” Mr. Jones, who has probably not received half a dozen letters from the bank during the half-year, will naturally refuse to pay this imposition.
Should a customer not have made arrangements with the manager as to the rates he is to pay, he would ask at what rates his account has been charged, and then proceed to check the banker’s figures in the manner indicated in these pages. Such an entry as “charges” has nothing better than its extreme vagueness to recommend it, and the client, when he finds this word in his pass-book, should, if he experience any difficulty in checking the figures, return it to the manager with the request that he will give him full particulars as to the rates of interest and commission, and also tell him the amount of any additional charge or charges, if there be any.
We can now make out a table of the amount Mr. Jones has to reclaim from his banker:—
| Customer’s Calculations. | Banker’s Calculations. | |||||||
|---|---|---|---|---|---|---|---|---|
| 4 per cent. per annum | 4 per cent. per annum | |||||||
| on £35,154 | £3 | 17 | 1 | on £37,422 | 4 | 2 | 0 | |
| ⅛ per cent. on £117 | 0 | 2 | 11 | ⅛ per cent. on £617 | 0 | 15 | 6 | |
| Postages, nil | 0 | 0 | 0 | Postages | 0 | 5 | 0 | |
| Balance to be refunded | 1 | 2 | 6 | |||||
| £5 | 2 | 6 | £5 | 2 | 6 | |||
The commission on £617 is 15s. 5¹/₁₀d., but a banker would charge 15s. 6d. Mr. Jones, we can see, has been overcharged to the extent of £1 2s. 6d., and we may rest quite assured that he will not be easy in his mind until he has recovered this sum from his banker.
Sometimes a customer, when ruling off his own books, draws a cheque for, say, £600, and pays it to his credit at the bank. This would be a cross entry. But does he understand that this sum will be included in his turn-over, and that if he be charged ⅛ per cent. thereupon, he pays 15s. to his banker for making a couple of entries in his ledger? Again, if the manager charge him three days’ interest at 5 per cent. per annum upon the sums paid to his credit, he will pay another 5s. (about), and at this rate a cross entry of £600 would cost him 20s. The luxury, it must occur to him, is expensive; and as this illustration is not a figment of my imagination it is evident that everybody who keeps a banking account should understand how to check a banker’s charges.
It seems an act of supererogation to point out that the average account would contain very many more entries than the one under review, but if the reader will carefully follow these instructions he should find little difficulty in checking the charges in any bank-book. Where the account has been overdrawn during the entire quarter or half-year the first “total” column must be used. Our example is that of a mixed account, and both columns are required; but should the account be a creditor one, then the extensions are made in the second “total” column, and the banker, of course, will allow the customer a rate.
When checking the interest of a loan account it is advisable to obtain a separate pass-book from the banker, and not to take out the entries from the current-account pass-book wherein the interest is debited. Should it be found that the commission has been charged upon the amount of the loan, the customer would ask for an explanation, and in checking his interest he would proceed in exactly the same way as shown in our example.
Again, we have seen that some customers arrange that their rate shall be either Bank rate or ½ above it, as the case may be. Suppose that the Bank rate on the 22nd April were raised from 3 to 3½ per cent., and that it had stood at 3 from 31st December. The customer, who has agreed to pay his banker ½ above Bank rate, will then owe 3½ per cent. per annum on the sum or sums he has borrowed from 31st December to 22nd April. Applying this hypothesis to the account under review, we rule a line beneath the figures 6,160 in “total” column, and add up the column, which comes to 30,600. From 31st December (exclusive) to 22nd April (inclusive) there are 112 days (see page 59), and, as the figures in the days’ column give the same result, we know that they are correct. The customer, then, owes his banker one day’s interest at 3½ per cent. per annum upon £30,600. At each change of the Bank rate this process must be repeated; so instead of having one rule-of-three sum to work out, as in our illustration, there may perhaps be four or five of them.
Should the fortunate possessor of a large creditor account have arranged with his banker that he is to receive 1½ per cent. below Bank rate on his daily credit balances, then assuming that the balances on our form were creditor, the banker would owe 1½ per cent. per annum on £30,600 for one day. The customer, when calculating the amount due to him, would proceed in the same manner as indicated above, and he might remember that, in arriving at the number of days from one change of the Bank rate to another, he excludes the day from which he calculates and includes the date to which he calculates. The rest is easy.